VAT - I under paid twice in 2 years

Y

yop

Registered User
Messages
403
HI
I am a sole trader, been working as contractor since Aug 2010 - didn't make enough to charge VAT.
In 2011 then I charged VAT to 2 customers of mine. I was doing my 2010 returns and the accountant said that I hadn't deducted my VAT costs (mobile, broadband) from my VAT returns.
I did it for Oct, Nov, Dec but I forgot to do the other months before that.

I did a VAT return in Oct 2011 but for some reason I entered a value of 1138 instead of 2138 as the VAT amount in ROS.
When you take into account the VAT I didn't deduct and the mistake above I now owe VAT of 723 euro for 2011.
Also for some reason I make a small mistake in my EXCEL spreadsheet which I use to record the figures and I underpaid for 134 euro.

Am I in for a big penalty or would they understand if I explained it was a genuine mistake?

Can I just make 1 payment to make up the difference that I owe them?

Thanks
 
Firstly, if you don't have someone qualified to give you tax advice go an get some one.
The internet is great for research and getting ideas, but you need professional advice.

As far as I know, if you are volunteering that you made a mistake they will go much easier on you than if they find out themselves. There may be a penalty but a qualified adviser will check that everything else is in order, confirm what you owe and how to proceed to minimise any penalty and reduce the risk of triggering an audit. I doubt the penalty (if any) will be much from what you described.

Finally, perhaps it's not a great idea to link to your blog in a post where you are declaring that you know you are not tax compliant. I guess it's not too difficult to figure out who you are.

Good luck!
 
Thanks v much for that.

I am making contact via email tonight and will be straight up with them. Its my own fault at the end of the day for not understanding and not keeping an eye on it better.

Thanks again, appreciate it.
 
yop said:
HI
I am a sole trader, been working as contractor since Aug 2010 - didn't make enough to charge VAT.
In 2011 then I charged VAT to 2 customers of mine. I was doing my 2010 returns and the accountant said that I hadn't deducted my VAT costs (mobile, broadband) from my VAT returns.
I did it for Oct, Nov, Dec but I forgot to do the other months before that.
Click to expand...


When did you register for VAT?

Basically, you have to register once it becomes apparent that you will meet the threshold in a 12 month period. It may be that you didn't need to register until 2011, but you cannot claim input credits until you register.

It appears you didn't charge VAT in 2010 but then did claim input credits for the same period?

In general if you have made an error like this and contact Revenue yourself (obviously with the help/advise of an accountant or tax advisor) then you can resubmit correct returns and it is unlikely to go any further.
 
Hi
Thanks for the reply, thats correct I wasn't eligible in 2010 but I knew that I would be in 2011 so charged and paid VAT during 2011 and 2012.

I didn't realise until i meet with my accountant to file returns for 2010, in Oct 2011, that I should have claimed credit for the VAT on purchases during 2011. That was my own fault for not understanding that.

I then forgot to claim the credits for the period Jan-Sept 2011 and only claimed for the months of Oct, Nov, Dec 2011 when the accountant highlighted this to me.

Thanks again
 
OK, you should submit amended return for 2011 including the VAT credits you omitted.

I really wouldn't worry too much about putting down 1138 instead of 2138 - once you sort it all out they won't come looking for interest or penalties or anything, just straighten things up asap and that will be the end of it.

Also, the thresholds apply to a 12 month period, not necessarily a calendar year.
 
Thanks
I am as well to contact them first, rather than do this through ROS?

Thanks
 
yop said:
Thanks
I am as well to contact them first, rather than do this through ROS?

Thanks
Click to expand...

I would get an accountant to do this for you. I applaud people doing it themselves - I have an uncle to dissected the TCA1997 himself to submit income tax returns - but for lesser mortals with queries especially where they acknowledge mistakes have been made, professional advice is needed.

Otherwise you will be posting query after query here, and invariably will take a wrong step somewhere along the line.
 
I find the OP's posts a little bit unclear, but if I'm reading it correctly the errors & understatements relate to VAT returns in 2011 & 2012, then he should be able to self-correct.

[broken link removed]

There would be no penalty and there may well not be interest given the relatively small amount involved.
 
Thanks v much for the details and links there. Thats hopefully that since its under 6000 euro then I may not be getting penalties.

I have made contact with them anyway and explained what happened, so I will give them a ring tomorrow to follow up.

Thanks
 
You must log in or register to reply here.
Back
Top